Online term insurance is one of the simplest and fundamental insurance products designed to ensure that your family gets the sum assured in the event of the policyholder’s unfortunate death.
Online Term insurance provides risk coverage during the policy term, and if the insured person dies during the time specified in the policy, then a death benefit is usually paid. It is a cheaper form of life insurance compared to offline term insurance in terms of premium.
While price can be a crucial parameter, you shouldn’t give all importance to it because it can put your and your family members’ financial security at risk. There are various parameters you can compare online term insurance in India and make informed decisions.
Here are eight parameters based on Insurance Regulator and Development Authority (IRDA) guidelines, which you can use to buy an online term insurance plan that best serves you.
Claim settlement ratio
The first parameter to compare insurance online is the settlement ratio which is the percentage of the claim paid out of the total claims filed in the year. It is vital to get a plan that offers a higher ratio for your dependent to claim in your absence.
The sole purpose of online term insurance is to secure a stable future for your dependent. So, the higher the claim settlement ratio, the better are the chances of ensuring that.
Average time required to settle a claim
You also need to factor in the average time your family members will need to settle the claim. The faster the insurance company’s speed of servicing, the more confidence you have that your family members will not run from pillars to post for getting the insurance amount that is due to them.
So, opt for online term insurance that ensures a faster and convenient process for your dependents to settle the claim. It also allows them to avoid emotional loss.
Solvency ratio is another crucial parameter to compare online term plans. It allows you to determine whether the insurer is financially capable of settling your claim if the need arises. As per IRDAI guidelines, every insurance company should maintain a minimum solvency ratio of 1.5.
The solvency ratio plays a vital role in a natural disaster where a considerable volume of claims needs to be settled quickly.
While exploring to compare insurance online, look for companies that have collected more considerable funds from both first-time buyers and renewals from existing insurance policies. Insurance companies with robust financial strength can deal with contingencies better.
Compare online term plan and choose one that ensures the easy and convenient settlement of claims. Only profit-making companies can ensure payment of claims in times of contingencies.
Easy to buy
Online term insurance is one of the most preferred methods to buy term insurance as it is cheaper vis-a-vis offline term insurance. Almost all insurance companies allow their customers to use an internet-enabled process to buy a term insurance plan based on their needs. Since the process is online, it is a hassle-free process.
Critical illness cover
The death of a significant earning member of the family is not only the time when a family’s financial security is at risk. Critical illnesses like cancer or brain surgery which cost a lot of money, can also cripple their finances.
A term insurance plan can also secure your family’s financial future in case of critical illnesses like cancer or brain surgery. It covers the cost of treatment and ensures that your dependents have the financial capacity to sustain their day-to-day life. Also, premiums paid for critical illness cover are also eligible for tax deduction under section 80D of ITR.
A term insurance plan comes with basic life cover in times of unfortunate events. However, there are plans with comprehensive coverage and benefits that you must consider if you plan to ensure your family’s financial security.
When you compare online plans at insurance brokers’ portal, you must look for benefits such as waiver of premium, accidental death cover, and income benefit. Family members receive a regular income from the plan.
Although it is essential to factor in the said parameters to compare online term plans to ensure you are getting the best deal out of the term insurance plan. You must also know things like the common mistakes to avoid and how to declare your medical history to prevent adverse impact on your term insurance policy claim.